index

Introduction
History
Objectives
What is Performance Appraisal?
Performance Appraisal Process.
Methods of Performance Appraisal
Conclusion.
 History
• Roots in the early 20th century
• The world's second oldest profession
• PA recognized by US government in 1950
• This became evident in the late 1980s.
• The UK (consistent with Europe) Employment
Equality (Age) Regulations 2006,
 Definition
• “Any system of determining how well an
individual employee has performed during a
period of time, frequently used as a basis for
determining merit increases.”

• “OBSERVE and EVALUATE an

employee’s in
relation to PRE-SET performance standards.”
 HR
programmes
Administrativ
Communication e uses

Organization
Constructive
al
criticism and
guidance PA Maintenance
Objectives

Documentatio
Pay scales & n
Pay raise

Training and Promotions

development
 Appraisal Process

Objectives of Establish job

Performance Appraisal Expectations

Design an Appraisal
Appraise Performance
Programme

Performance Interview Archive

Appraisal Data

Use appraisal data for

appropriate purposes
THREE AND ONE
• WHO ?
 SUPERVISORS DO EVALUATIONS
• WHAT ?
 COMPLETION OF JOB TASKS
• WHEN ?
 NEW EMPLOYEES 3-6 MONTHS
• HOW ?
 SPECIAL CARE & RESPECT
 Sources of Information
1) Supervisors (most common)
• Role Conflict (e.g., judge and trainer/teacher)
• Motivation
• Time availability
• Friendship

2) Co-Workers (Peers)
• Friendship bias

• Leniency
• High level of accuracy
• Best used as a source of feedback
 Sources of Information (cont)
3) Self
• Lots of knowledge
• Leniency effect
• Good preparation for performance appraisal meeting (conducive
for dialog)

4) Subordinates
• Biases (e.g., # of subordinates, type of job, expected evaluation
from supervisor)

5) Client
• Good source of feedback

• Negativity bias
 Methods of pa
1. Confidential Report
2. Graphic Rating Scale
3. Ranking Method
4. Forced Choice Method
5. Critical Incidents Method
6. MBO
7. Checklist
8 Forced Choice Method
9 Critical Incidence Method
10 Performance Tests and Observations
11 Field Review
12 Rating Scales
13 Forced Distribution Method
14 Behaviorally Anchored Rating Scales
 confidential report

• Evaluation of Characteristics e.g. Loyalty,

attendance
• Traditional Method
• Workshop on Performance Appraisal in 1983
• Objectives of Category “C” & “D”
• Characteristics should be easily understandable .
• Rating scale of report should be introduce as
Qualitative Reporting.
Graphic rating scale
• Measure the degree of characteristics required for
adequate performance of the job.
• Sawlapurkar(1967), Dayal(1969), Bolar(1978),
Dwivedi
Poor Average Good Excellent

Quantity of Work
1 2 3 4
Quality of Work
1 2 3 4
Job knowledge
1 2 3 4
Dependability
1 2 3 4
Attitude
1 2 3 4
 Ranking method
• Employee is evaluated by different Supervisors with
ranks and then these ranks are grouped to see which
employee is rated “BEST”. E.g.

Subordinates A B C Mean Rank

Mohan 2 4 3 3.0

Kumar 1 2 1 1.3

Sunil 3 1 2 2.0

Bharat 5 3 4 4.0

Ravi 4 5 5 4.6
 Forced Choice method

• Supervisor asked to indicate one least &

one most descriptive statement for
particular subordinate.
• Each statement carries some weight
which is not known to the supervisor.
• Statistical tools having numerical score
provides merit of employee.
 Critical incidents method
• Any critical incidents or Outstanding examples
of success or failure of subordinates is
recorded by supervisor.
• It improve the supervisor ability as an observer
• Identifies Areas where counseling may be
useful.
• It is less Reliable and valid for many
organizations.
 Management By objectives
• “Management by Objectives (MBO) is a
process of agreeing upon objectives within an
organization so that management and
employees agree to the objectives and
understand what they are.”
• Largest user of MBO in India is public sector
but failure of it is lack of performance
appraisal system.
• Setting goal is difficult in MBO.
Five step mbo process
Organizational
Objectives
Reviewed

Achievers Set
Employee
Rewarded Objectives

Performance
Progress
Evaluated
Monitored
• Explanation of MBO in
more detail as its an
important topic
MBO HAS A METHOD OF
PERFORMANCE
APPRASIAL.USES AND
LIMITATIONS
 DEFINITION
• A GOAL –DIRECTED APPROACH TO
PERFORMANCE APPRAISAL IN WHICH
WORKERS AND THEIR SUPERVISORS
SET GOALS TOGETHER FOR THE
UPCOMING EVALUATION PERIOD
 USES

• THE OUTCOME APPROACH

PROVIDES CLEAR AND AMBIGUOUS
CRITERIA BY WHICH WORKER
PERFORMANCE CAN BE JUDGED.
• IT ALSO ELIMINATES SUBJECTIVITY
AND POTENTIAL FOR ERROR AND
BIAS THEN ALONG WITH IT.
• PROVIDES FLEXIBILTY
 EXAMPLE
• A CHANGE IN THE PRODUCTION
SYSTEM MAY LEAD TO A NEW SET OF
OUTCOME APPROACHES AND
MEASURES AND PERHAPS A SET OF
PERFORMANCE STANDARDS .
 USES
THIS HAPPENED BECAUSE OF MBO
A WORKERS OBJECTIVES WERE
BETTER UNDERSTOOD AT THE
BEGINNING OF A NEW EVALUATION
PERIOD IF THE ORGANISATION
CALLS FOR EMPHASES
 LIMITATIONS
• SUPPOSE THE EQUIPMENT OR THE
MACHINERY IS WORKING FINE THEN
ANY INEXPERIENCED LABOUR CAN
DO THE JOB BUT WHAT IF THE
MACHINERY IS NOT WORKING
PROPERLY THEN WILL THE
INEXPERIENCED PERSON WOULD BE
ABLE TO RESOLVE THE PROBLEM
 LIMITATIONS(CONTD)
• IF YOU WERE THE MANGER WHAT
WOULD YOU DO ?
• GET THE BEST WORKER ON TO THE
JOB DEPENDING ON HIS
PERFORMANCE RECORDS
• BUT YOUR WORKER WOULD
ACTUALLY END UP LOOKING LIKE
THE WORST WORKERS IN THE
TERMS OF THE AMOUT OF PRODUCT
PRODUCED
 LIMITATIONS (CONTD)

• POTENTIAL DIFFICULTY WITH OUTCOME

BASED- PERFORMANCE MEASURES IS
THE DEVELOPMENT OF A”RESULTS AT
ANY COST” MENTALITY. FOR EXAMPLE ,
AN ORGANISATION MAY USE THE
NUMBER OF UNITS PRODUCED AS
PERFORMANCE MEASURE BECAUSE IT
IS FAIRLY EASY TO QUANTIFY.WORKERS
CONCENTRATING ON QUANITITY MAY
NEGLECT QUALITY AND FOLLOW UP
SERVICE TO THE LONG –TERM
DTERIMENT OF THE ORGANISATION
 DEFINITION OF OUTCOME
MEASURE
• “THE NUMBER OF UNITS PRODUCED
THAT ARE WITHIN ACCEPTABLE
QUALITY LIMITS”
 Checklist
• Statement on the traits of employee and
his job
• When points are allotted it becomes –
weighted checklist

• Advantage – standardisation, economy,

ease of use
• Disadvantage – relative rating is not
possible
 Field Review
• A senior member of the HR department or
a training officer discusses and interviews
the supervisors to evaluate and rate

• The assessor does not belong to the

ratee’s department.
 Essay Method
Employee is described in a number of broad
categories like
• Overall impression
• Strengths and weakness

The strength of this method is the writing

skills and analytical skills of the rater.
Comparative Evaluation Approaches

• Conducted by supervisors.

• These appraisals result in ranking from

best to worst – helpful in deciding merit
pay, promotions and organisational
rewards.
 Paired-Comparison Method

• The appraiser compares each employee

with every other employee
PROCESS
First: A and B are compared
Second: Then A is compared with C,
D,E….
Paired-Comparison Method (contd..)

The no. of comparisons may be calculated

with the help of a formula:
N (N-1)
2
where N is the no. of employees to be
compared.
 PA in Government
Organisations
• Most commonly used method is
Confidential Reports

Discrepancies
– Lack of accountability
– Laid back attitude due to high level of job
security
– Unrealistic objectives
– Team appraisal is often not possible
 Compensation and Performance

• Merit Pay

• Profit Sharing

• Incentives and Performance Bonus

• Gain Sharing
 Current Global Trends in PA
• Trend towards a 360-Degree feedback
system
• Problems in implementation are
anticipated and efforts are being made to
overcome them
• Team Performance Appraisal
• Rank and Yank Strategy
• TQM an Performance Appraisal
 Challenges

• Determining the evaluation criteria

• Lack of competence
• Errors in rating and evaluation
• Resistance
360º PERFORMANCE
APPRAISAL
 CONTENTS
 INTRODUCTION TO 360º PA
 WHO DOSE 360º PA?
 WHY TO USE 360º PA?
 HOW TO IMPLEMENT 360º PA?
 TIMING OF 360º PA
 USES OF 360º PA
 ADVANTAGES OF 360º PA
 DISADVANTAGES OF 360º PA
 COMPANIES USING 360º PA
 SAMPLE QUESTIONNARIE
 INTRODUCTI0N
A developmental and/or performance
appraisal tool which utilizes multiple-
source feedback from people who work
most closely with the employee.
It is also known as multirate
feedback,multisource feedback &
multisource assessment.
It is done either by interview method or
questionnaire
Who Does 360º PA?
 Why to use 360º PA?
 It provides the individual with an opportunity to
learn how different colleagues perceive them,
leading to increase self-awareness.
 It encourages self-development.
 It increases understanding of the behaviours
required to improve personal and organisational
effectiveness.
 Contd…
It promotes a more open culture where
giving and receiving feedback is an
accepted norm.
It increases communication within the
organisation.
It can be a powerful trigger for change.
 How to implement 360º PA?

DEFINE SKILL EXPLAIN THE DISTRIBUTE

MODEL PUROSE OF QUESTIONNAR
THE PROCESS IES

DISCUSS PROCESS COMPLETE

WITH QUESTIONNARI QUESTIONNAI
EMPLOYEE ES RES

PROVIDE FEED
BACK
 Timing of 360º PA
It is not appropriate to introduce it during
periods of downturn or when re-
organisations have been announced.
 Uses of 360º PA
Validating selection processes and
development programmes
Identifying training and development
needs
Pinpointing skills and competencies
Making personnel decisions such as
promotions, terminations, salary hike and
probationary status
Career development
 Contd….
Employee coaching
Supervisory training
Management development
 Advantages
Increase awareness of senior
management that they too have
development needs.
More reliable feed back to senior manager
about their performance.
Encouraging more open feed back.
Identifing key development areas for the
individual, a department and organization
as whole.
 Contd…
Identifying strength that can be used to the
best advantages of business.
Provide clear picture to senior
management about individual’s real worth.
Raising self awareness of employee &
managers about how they personally
affect others positively& negatively.
 Disadvantages
People not giving frank or honest feed
back.
People being put under stress in receiving
or giving feed back.
Lack of action following feed back.
Too much bureaucracy.
 MNC’sUsing 360º PA

 American Airlines  Intel

 AT&T  Herman Miller
 American Express  J.P. Morgan
 Boeing  Morgan Stanley
 Compaq  Motorola
 General Electric  Procter & Gamble
 Glaxo  Levi Strauss
 General Mills  3M
 Hewlett-Packard  FedEx
 Indian companies using 360º PA
Reliance Industries
Crompton Greaves
Godrej Shops
Wipro
Infosys
Thermax
GE(India)
 ERRORS IN
PERFORMANCE APPRAISAL,
WAYS & MEANS TO REDUCE IT
Performance Appraisal and Other HRM Functions
Performance appraisal judges Quality of applicants
effectiveness of recruitment Recruitment determines feasible
efforts performance standards

Selection should produce

Performance appraisal
Selection workers best able to meet
validates selection function
job requirements

Training and development

Performance appraisal Training and
aids achievement of
determines training needs Development performance standards

Performance appraisal is a Compensation Compensation can affect

factor in determining pay Management appraisal of performance

Appraisal standards and

Performance appraisal
justifies personnel actions
Labor Relations methods may be subject to
negotiation
 Reasons Appraisal Programs Sometimes Fail
 Lack of top-management information and support
 Unclear performance standards
 Rater bias
 Too many forms to complete
 Inadequate preparation on the part of the manager.
 Employee is not given clear objectives at the beginning of
performance period.
 Overemphasis on uncharacteristic performance.
 Organizational politics or personal

relationships judgments.
 Manager may not be trained at evaluation or giving feedback.

 No follow-up and coaching after the evaluation

 Halo Error/Horn Error

Attribtion bias First Impression

Error
Common
Central Tendency
Errors in the
Error Appraisal Recency Error
Process
Stereotyping
Leniency Error

Severity Error
 Halo Error/Horn Error:
rating a single individual based on the interviewer’s general feeling toward the individual so that
employee receives nearly identical ratings (usually high) on all performance areas

Responsibility
Commitment
Initiative
Sensitivity
Judgment
Communication

High ratings on other Observation of specific

performance behavior (s) (e.g., volunteers
dimensions to work overtime)
• Tendency of a First Impression
rater to make an initial Error
positive or negative
judgement of an employee and allow that first impression to
color or distort later information

Leniency Error
• give more positive ratings to employees than they
deserve

Severity Error
• evaluate employees more unfavorably than they deserve

Central Tendency Error

• rating all employees near the mid-point of the
performance scale
 Recency Error
• The tendency of minor events that have happened
recently to have more influence on the rating than
major events of many months ago.
Stereotyping
• The tendency to generalize across groups and ignore
individual differences.
Strategies to Better Understand and Measure
Job Performance

Improve Appraisal Formats

Select the Right Raters

Understand Why Raters Make

Mistakes
 Training Raters to Rate More
Accurately
 Rater-error training to reduce psychometric errors
 Performance dimension training
 Performance-standard training
Prescriptions for Legally Defensible Appraisal Systems
1) Ensure that procedures for personnel decisions do not differ as a
function of the race, sex, national origin, religion, or age of those
affected by such decisions.
2) Use objective and uncontaminated data whenever they are available.
3) Provide a formal system of review or appeal to resolve
disagreements regarding appraisals.
4) Use more than one independent evaluator of performance.
5) Use a formal, standardized system for personnel decisions.
6) Ensure that evaluators have ample opportunity to observe and rate
performance if ratings must be made.
7) Avoid ratings on traits such as dependability, drive, aptitude, or
attitude.
8) Provide documented performance counseling prior to performance,-
based termination decisions.
Assessment Centres
- Process & Methods
 Presentation Outline :-
• What is meant by a Assessment
Centre?
• When are they conducted?
• Dimensions of Assessment Centre.
• The Assessment Process
• How Effective are Assessment
Centres
• Current Trend in Assessment Centres
• Questions 64
 Assessment Centre

It’s a process not a Place or a Location.

• It’s a process which is being

increasingly used by middle to large
organizations
In Recruitment.
In Promotions to identify staff who possess strong
potential for higher level positions.
In training and development. Etc..
65
 Assessment Centre
• It’s a process where a group of
participants undertake a series of job-
related exercises under observation,
so that
• Skills
• Competencies and
• Character traits of an individual can be assessed.

• Specially trained assessors evaluate

each participant against
predetermined criteria.
66
When are they conducted?

Assessment Centres are used after the

initial stages of the selection process.
• Other measurements such as
psychological tests may complement
the selection process.
• Other recruitment activities, which are
currently gaining favour, such as an
expected attendance with other
hopeful recruits at a company social
function, are not part67 of Assessment
 What do assessors look for in a
candidate – the dimensions
Adaptability: Ability to react to changing situations or
information in a timely manner.
Decisiveness: Readiness to make decisions, render
judgments, take action, or commit one-self to a course
of action.
Delegation: Ability to use subordinates effectively.
Development of Subordinates: Ability to maximize
human potential of subordinates through training and
developmental activities.
Independence: Ability to act based on own convictions
rather than through a desire to please others.
Initiative: Desire to actively influence events rather than
passively accepting them; self-starting; takes action
beyond what is necessarily called for.
Interpersonal Relations: Ability68
to perceive and react
to the needs of others, paying attention to others'
 What do assessors look for in a
candidate – the dimensions
• Judgment: Ability to evaluate courses of action, develop alternative
courses of action, and to reach logical decisions based on the
information at hand.
• Listening: Ability to extract important information in oral
communications and to convey the impression that one is interested in
what others have to say.
• Organizational Sensitivity: Ability to perceive the impact of a
decision on the rest of the organization, awareness of the impact of
outside pressures on the organization.
• Persuasiveness: Ability to organize and present material in a
convincing manner to gain agreement or acceptance.
• Planning and Organization: Ability to efficiently establish an
appropriate course of action for self and/or others, to accomplish a
specific goal, make proper assignments of personnel, and appropriate
use of resources.

69
 Assessment Process :-
• Some of the Common Exercises done
are :-
– Exercises to measure a particular set of
job skills.
– Case Studies
– In Tray exercises
– Group exercises
– Role plays

70
 Exercises to measure a
particular set of job skills.
• For Example :- Recruits for a car
production line were tested on
physical strength, coordination and
aptitude for production line work, by
repeatedly fitting tyres onto wheel
rims.

• Accounts Clerk recruits were asked to

complete tests measuring
71
accuracy
against speed.
 Case Studies
• Project Managers may be asked to
plan for the release of a new product,
which incorporates scheduling,
budgeting and resourcing.

• This type of exercise may measure

the ability to: analyse complex data
and issues; seek solutions; project
plan; and present findings, using a
mixture of presentation
72
skills.
 In Tray exercises
• In In Tray exercise, you may be asked
to assume a particular role as an
employee of a fictitious company and
work through a pile of correspondence
in your In Tray.
• These tests commonly measure Job
Skills such as: ability to organise and
prioritise work; analytical skills;
communication with team members
and customers; written73 communication
 Group Exercises

• Group exercises involve candidates

working together as a team, to resolve
a presented issue.

• These exercises commonly measure

interpersonal skills such as group
leadership, teamwork, negotiation,
and group problem solving skills.
74
 Role plays

• If you are asked to do a role play, you

will be asked to assume a fictitious
role and handle a particular work
situation. Customer Service Officers
may be asked to respond to a number
of phone inquiries, including customer
queries and complaints.
• This type of exercise may measure:
oral communication, customer service
orientation, and problem
75
solving.
 How effective are
Assessment Centres?
Assessment Centres have provided higher
validity levels for test outcomes than other
selection methods.(Landy 1989). Due to the
wider range of skill measurements used,
which other tests may lack.
Effectiveness of each Assessment Centre will
depend on the strength of its component
exercises.
Work simulation tests may closely match the
expectations of the employer organisation.
The assessors may be senior company
employees who have an ongoing involvement
with and interest in the successful
76 candidate,
 Current Trends in
Assessment Centre.
• There has been a trend towards using
the term “Development Centre”, in
place of “Assessment Centre”.
• Helped in Gain in reduced anxiety.
• Participants find the term
“development” more friendly and less
threatening than “assessment”.

77
 Example of In Tray exercise
• A common example of an in tray
exercise at first level management
may involve: placing you in a
particular role within a work setting,
where a crisis situation is developing.
The situation requires you to take
responsibility for the situation. During
the exercise, mail is delivered and
collected each half hour. The exercise
will describe what resources
78 are
• a highlighter, pen, pencil, eraser,
ruler, internal memo pad, letterhead
stationery, writing pad, envelopes, out
tray, and an in tray containing
particular items. Intray items may
range from requests to return calls to
customers with specific complaints
and queries, comments to be provided
to your manager, reports to be
completed, requests79from your staff,
Example of Group Exercises
• One example of a problem solving
scenario includes a Tower Building
exercise, using play building blocks.
• In this exercise, a group may be
competing with other groups to design
and build a tower in accordance with a
construction brief which may stipulate
minimum height, time period the
completed tower has to stand
'unsupported', colour, cost of block
shapes, a time limit,80and a budget.